New National Congress of Argentina to take office

Argentine lawmakers elected in November’s congressional elections will take office today.

The ruling Front for Everyone lost 3 seats in the Chamber of Deputies and 6 seats in the Senate, losing its senate majority. The center-right opposition Together for Change gained 6 senate seats and the far-left Workers’ Left Front gained 4 chamber seats.

The government’s loss comes amidst an economic downturn, with an annual inflation rate of 52.1% and an unemployment rate of 9.6%. Investors are worried about a possible currency devaluation that could lead to billions of dollars in losses. In November, the government submitted a new economic program to Congress to help convince the International Monetary Fund (IMF) to restructure $43 billion in debt.

Expect the coalition’s loss of the senate to delay passage of its economic plan as opposition senators enter negotiations. The final plan will likely include cuts to welfare programs in addition to a crackdown on tax evasion. Expect Argentine President Alberto Fernández to use the opposition’s entrance into negotiations to increase his program’s credibility with the IMF and as a scapegoat for the plan’s potential negative effects going into presidential elections in 2023.